Economic outlook

Activity in the region has benefited from lower oil prices and the gradual recovery in the euro area, but elevated corporate debt is hindering private investment, according to the IMF’s latest World Economic Outlook report.
The World Bank, for its part, has commented that a notable revival of investment underpinned economic growth, particularly private investment - both foreign and domestic. Exports are also helping to fuel this growth. Improving productivity, however, remains pivotal for boosting growth in the region.

Agrokor woes

Croatia's largest privately-held concern Agrokor has been in financial turmoil since January when global ratings agency Moody's downgraded its corporate family rating (CFR) to B3 from B2. Following Moody's decision, Agrokor pulled out of a syndicated loan deal it had struck with several international lenders, which sent the price of its bonds on international markets into a downward spiral.

Difference between Agrokor's actual capital at end-2016 and reported capital a year earlier.

3Deal or no deal

M&A/Privatisation

As Southeast Europe returns to steady economic growth, the mergers and acquisitions (M&A) market in the region is picking up again and an increasing number of both local and foreign investors push ahead with expansion plans. Romania holds the largest share of the region's M&A market, as the value of deals struck in the country last year is estimated at $3.54 billion (3.58 million euro), according to global consultancy Ernst&Young (EY). The most active M&A sectors in the region are IT, manufacturing, and wholesale&retail.

Published for the first time in 2015, it surveys 8,000 citizens and 1,600 businesses in Albania, Bosnia and Herzegovina, Croatia, Kosovo, Montenegro, Serbia and Macedonia, on a wide range of issues dealing with the political, socio-economic, business and investment climate, infrastructure, rule of law and other developments in the region.

5Bold&Beautiful

Startups

Feeding on an abundance of high-tech talent and financial support under European-funded programmes, the fledgling start-up ecosystem in SEE has evolved significantly over the past years, in Bulgaria, Croatia and Romania in particular. The leading accelerators in Bulgaria, LaunchHub and Eleven, alone have backed financially over 150 startups.

Chinese investments in Serbia

In 2013 Chinese president Xi Jinping unveiled the One Belt and One Road Initiative - a development strategy under which China plans to invest hundreds of billions of euro in other countries in Asia and in Europe in a bid to strengthen its role in global affairs. The strategy focuses on projects in transport infrastructure, energy, iron and steel. Countries in SEE fall within the strategy's scope, with Serbia attracting the most generous share of Chinese investments.